"Fiscal cliff" deal reached between White House, lawmakers -source

The U.S. Capitol Building stands in Washington December 17, 2012.
REUTERS/Joshua Roberts

WASHINGTON The White House and congressional lawmakers have reached a deal to avoid the "fiscal cliff" that would delay harsh spending cuts by two months, Obama administration officials said on Monday.

President Barack Obama called Democratic Senate Majority Leader Harry Reid and House of Representatives Minority Leader Nancy Pelosi, who both signed off on the deal, one source said.

The agreement includes a balance of spending cuts and revenue increases to pay for the delay in the automatic spending cuts that would go into effect without a deal by lawmakers.

Of those spending cuts, 50 percent would come from defence and 50 percent from non-defence areas, the sources said. The White House viewed that as a victory, one source said, and sees it as a model for future deficit reduction pacts.

Vice President Joe Biden travelled to Capitol Hill to discuss the deal.

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